The N.H. Supreme Court says the N.H. Retirement System board of trustees wrongly denied petitions to adjust the pension payments for eight former Keene School District teachers, effectively reducing their retirement income. The decision issued Thursday morning upholds those made previously by the state’s top court, Cheshire County Superior Court and a third-party arbitrator over the course of more than five years.
The teachers argue the board was wrong to deny their requests since they did not consent to a 120-day delay in the payment of their early retirement stipends. The N.H. Retirement System (NHRS) calculates teachers’ pensions by averaging their three highest-earning years. After an employee’s last year of work, any final bonuses or early-retirement incentives must be paid within 120 days to be added to that year’s salary and factored into pension calculations.
The court directed the retirement system’s board of trustees to reverse its decision and recalculate the teachers’ pensions, according to the opinion.
“In light of our decision in Keene School District v. Keene Education Association, … we conclude that the petitioners could not have consented to the 120-day delay in stipend payments and that they were not at fault for any delay,” Justice Patrick E. Donovan wrote in Thursday’s opinion. “… We reverse and remand to the NHRS for proceedings consistent with this opinion.”
A spokesperson for NEA-New Hampshire, a statewide teacher union with which the Keene Education Association is affiliated, said they were unable to provide a comment by deadline.
Robert Malay, the superintendent of N.H. School Administrative Unit 29, which includes the Keene School District, said Thursday afternoon that the district will “be looking at the language in the decision and the parties involved.”
“I don’t have an immediate response about how this will impact the district, but we did some initial projections a few years ago that I’ll be looking at as we move forward,” he said.
The pension dispute dates to April 2019, when two Keene School District teachers — Randall Burns and R. Scott Hyde — filed a grievance with the district over its decision to wait until several months after their retirements that July to pay their early-retirement stipends. The N.H. Supreme Court affirmed in 2022 that the Keene School District had violated the terms of its collective bargaining agreement with the teachers’ union.
Early retirement incentives offer experienced teachers the opportunity to retire before they would be eligible for full pension benefits. Teachers take this incentive for various reasons, including the appeal of early retirement or a need to stop working for health reasons. These incentives have become increasingly prevalent over the past decade across the U.S., as states and school districts seek to reduce their personnel costs.
An early retirement benefit has existed in the collective-bargaining agreement between the Keene Education Association and the Keene School District since 2005. Teachers who are 55 or older with at least 20 years of full-time service in the district can apply for early retirement benefits and, if selected, receive an annual stipend based on a five-year average of their salary and the total number of years of service. When an application for early retirement is approved, the teacher receives stipend payments until they reach the age of retirement, until their death or for a maximum of seven years, whichever comes first.
Up until 2011, teachers who took advantage of the early-retirement incentive would stop working July 1 and receive their first payments in late August or September, per previous Sentinel reporting. However, the state redefined “earnable compensation” by the retirement system in 2011, stating that after an employee’s last year of work any final bonuses or early retirement incentives must be paid within 120 days to be considered earnable compensation by the retirement system. That money would be added to the year’s salary and included in pension calculations.
This means that any final bonuses or early-retirement incentives to the teacher’s pension made 120 days after retirement would be excluded and their monthly payments would be lower.
Burns and Hyde — who taught at the Cheshire Career Center and Keene High School, respectively — were approved for early retirement in December 2018, with their retirements effective July 1, 2019. However, they received letters from the district notifying them that they would begin receiving their early-retirement stipends in November, which is outside the 120-day window for those payments to count toward their pensions.
They argued that by delaying those payments, the district intentionally lowered their lifetime earnings by about $100 a month for the entirety of their pensions. In April 2020, a third-party arbitrator — Boston-based James S. Cooper — ruled in the union’s favor, saying the district had misapplied the terms of the collective-bargaining agreement between the district and the Keene Education Association.
The district appealed Cooper’s decision to the Cheshire County Superior Court, arguing that he had ruled incorrectly and had issued a judgment beyond the scope of its arbitration request, but Superior Court Judge David Ruoff dismissed those claims in January 2020. The district then appealed to the state Supreme Court, which ruled in the union’s favor in 2022.
Since the arbitrator’s decision was upheld, former teachers who also earned those benefits may ask the NHRS for corrected pensions.
In March 2022, five additional retired teachers filed petitions with the NHRS to adjust their pensions. The petitioners and the Keene School District submitted written arguments and presented oral arguments before the NHRS hearings examiner in December 2022.
The hearings examiner recommended in March 2023 to deny the petitions for the eight teachers — who retired between 2012 and 2017 — saying that the school district clearly informed them “of the date they intended to begin making the payments, and that the delay would result in no contributions being made to NHRS on the payments,” according to the court opinion, noting that they did not file grievances. The examiner recommended granting the petitions to Burns, Hyde, and others who objected to the timing of the payments and filed grievances.
The Keene Education Association has previously stated that the district intentionally delays early retirement payments to save money and that this practice decreases teachers’ pensions. The Keene School District has denied those allegations, saying it was delaying early-retirement stipends so those earnings wouldn’t incur mandatory NHRS wage deductions. The district has also argued that there was a common understanding of the reason behind delayed payments. The district could owe employer-mandated contributions on past employees’ revised earnings.
Bill Gillard, president of the Keene teachers’ union and a math teacher at Keene High School, was not reachable for comment by deadline.
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